The Swedish government, in coordination with its coalition partners, has proposed a reduction in the SINK tax rate1 for nonresident individuals, including Swedish citizens residing abroad. The tax rate is 25 percent and the suggestion is that it be reduced to 22.5 percent from 2026 and to 20 percent from 2027. Parliament will vote on the proposal in December 2025.
In the Budget Bill for 2026,1 (Budgetpropositionen för 2026) the government indicates that the original intent of SINK (Särskild Inkomstskatt för Utomlands Bosatta, the special tax for nonresidents) was to provide a straightforward and administratively efficient tax process for individuals living outside of Sweden. This includes not having to file an annual tax return.
The proposed rate reduction is intended to encourage continued use of the SINK system.
WHY THIS MATTERS
The reduction in the SINK rate could affect certain Swedish citizens and other individuals deemed nonresidents of Sweden for tax purposes. A lower tax rate can help to enhance taxpayers’ cash flow and reduce the burden of tax. Moreover, the tax costs tied to international assignments – from the employer’s perspective – would be lower.
The phased implementation (highlighted below) would allow time for procedural and budgetary adjustments.
Context
In recent years, increases in tax credits for Swedish residents have led to more nonresident individuals requesting assessment under the regular tax regime, which may result in a lower tax burden compared to SINK-tax, but requires filing an annual tax return. This has added to the administrative workload of the Swedish Tax Agency (Skatteverket).
Key Highlights
- Tax Rate Reduction: SINK rate would decrease from 25 percent to 22.5 percent in 2026 and to 20 percent in 2027.
- Affected Population: Approximately 90,000 nonresident individuals would benefit from the reform.2
- Fiscal Impact: Estimated reduction in tax revenue of 340 million kronor in 2026 and 680 million kronor annually from 2027.3
KPMG INSIGHTS
- Organisations may wish to review the eligibility of their employees for SINK and consider the most appropriate tax regime for their expatriate (nonresident) employees subject to tax in Sweden. Also, when and if enacted, organisations should update payroll systems to reflect the new rates.
- If and when enacted, organisations and/or their tax services providers may wish to revise their policies and communicate the changes clearly to stakeholders, including their affected expatriate employees.
If affected assignees and/or their programme managers have any questions or concerns about the changes to SINK, about the timing of the reduced rates and suitability of the regime for their employees, as well as the impact for their assignees and the mobility programme’s tax-related costs, they should consult with their qualified tax professional or a member of the GMS tax team with KPMG in Sweden (see the Contacts section).
FOOTNOTEs:
1 (In Swedish) Regeringens proposition 2025/26:1, Budgetpropositionen för 2026.
2 Ibid.
3 Ibid.
RELATED RESOURCES:
"Government proposes reduction of SINK tax to 20 percent" (23 May 2025), published online by KPMG in Sweden. See: https://kpmg.com/se/en/insights/newsletters/taxnews/2025/government-proposes-reduction-of-sink.html .
V. Robinson, "Sweden proposes reduction of SINK rate in move towards greater tax neutrality" in International Tax Review (June 16 2025) at: https://www.internationaltaxreview.com/article/2exxc6fxf2eusxxvb9pfk/sponsored/sweden-proposes-reduction-of-sink-rate-in-move-towards-greater-tax-neutrality . By clicking on this link, you are leaving the KPMG website for an external (non-governmental, non-KPMG) site, that KPMG is not affiliated with nor does KPMG endorse its content. The use of the external site and its content may be subject to the terms of use and/or privacy policies of its owner or operator.
Contacts
Disclaimer
The information contained in this newsletter was submitted by the KPMG International member firm in Sweden.
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